Urgent warning for thousands on benefits as major change could plunge renters into debt
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Urgent warning for thousands on benefits as major change could...

THOUSANDS of households could be left at risk of falling into debt with their landlords due to a major benefits shake-up.

Those claiming housing benefit will be asked to move to Universal Credit next year as part of the Department for Work and Pensions (DWP) managed migration scheme.

AlamyThousand on housing benefit need to be aware of a major change to their rental payments from next year[/caption]

But the move to Universal Credit will mean that these households will no longer have their rents paid automatically to their landlord.

Instead, the housing element of Universal Credit is paid into the claimant’s bank account once a month along with the rest of their allowance.

It is then the responsibility of the tenant to pay their landlord on time.

But a charity is warning that some could find it difficult to pay on time and may end up with rent arrears.

A report by the Child Poverty Action Group today said that many could end up falling into debt because of this change in payments.

The report said: “Claimants moving from housing benefit to Universal Credit through natural migration (where they move because their circumstances have changed) often fall into rent arrears as they adjust to the system of using their monthly benefit payment towards their rent.”

But the charity has warned the DWK that it’s “crucial” that all housing benefit claimants due to move to Universal Credit through managed migration are aware that the housing element isn’t paid directly to their landlord as rent.

It’s also said that those in serious debt or with a mental health condition need signposting to the fact that they could ask their landlord to request for their housing element to be paid as rent automatically.

This level of awareness is needed to help prevent the most vulnerable household from falling into rent arrears once they receive managed migration notices.

In response to the findings, a Department for Work and Pensions spokesperson told The Sun: “Those on housing benefit who move to Universal Credit receive an additional two weeks housing benefit when they start their claim, helping to prevent rent arrears as they adapt to the new monthly payment cycle.

“Universal Credit mirrors the way wages are paid, with people receiving monthly payments to help them take ownership of their own budget.

“For those who need additional support, safeguards such as direct payments to landlords are available and claimants should speak to their work coaches if they have any concerns.”

Who can get their Universal Credit housing element paid directly to landlords?

If you or a landlord are worried that you cannot manage the single monthly Universal Credit payment and there is a risk of financial harm to the claimant you may qualify for an alternative payment arrangement (APA).

APA may be considered at any point during the Universal Credit claim. They may be identified at the outset by a work coach, or case manager, or at any time during the claim.

They can also be triggered by information received from the claimant, their representative or their landlord.

The DWP recognises that some claimants will need extra support in managing their bills.

Therefore, in some cases, a managed payment to landlord (MPTL) might be appropriate.

An MPTL can be made when:

A claimant is in arrears with their rent for an amount equal to, or more than, two months of their rent A claimant has continually underpaid their rent over more than two months, and they have accrued arrears of an amount equal to or more than one month’s rent A claimant was previously in receipt of housing benefit and it was paid to their landlord

They can also qualify if they have:

Drug/alcohol or other addictions such as gambling Learning difficulties Severe and multiple debt problems Live in temporary accommodation Been a victim of domestic violence and abuse Have a mental health condition A family with multiple and complex needs

Who can request a managed payment to landlord?

Either the claimant or their landlord can make the request for MPTL.

If the claimant is making the request, this can either be:

Via their journal on their online Universal Credit account During their meetings with their work coach or case manager By phoning Universal Credit on 0800 328 5644

Following a request for a MPTL a decision will be made whether or not a managed payment is appropriate and both the landlord and claimant will be informed of the decision.

What is managed migration?

Over two million people are still on old-style legacy benefits, but the government plans to move the majority of them onto Universal Credit by the end of 2024.

Over 500,000 managed migration notices have already been sent out to those in receipt of tax credits in Avon, Somerset and Gloucester.

In these notices, claimants on tax credits are asked to claim Universal Credit instead.

Claimants will continue to receive the payments that they are entitled to once moved to Universal Credit if they receive these notices, according to the DWP.

The process began in April this year following a successful pilot in Harrogate, Yorkshire, in July 2019.

By September 2023, it expects to have made contact with all households on tax credits in all regions of Great Britain.

The DWP expects to migrate all of those receiving income support, income-based jobseeker’s allowance and housing benefit to Universal Credit in 2024.

And those receiving income-related employment and support allowance (ESA) are expected to be migrated by the end of 2028.

In most cases, individuals will be better off following a move from legacy benefits to Universal Credit.

But 300,000 could be worse off, and should not move until they absolutely have to as they could end up with less money.

Where an individual’s Universal Credit payment is lower than their legacy benefits entitlement, they will usually be entitled to a top-up payment known as transitional protection. 

This means that their Universal Credit entitlement will be the same as their legacy benefit entitlement at the point they move.

Recipients who receive a migration notice and fail to act will risk losing their current benefits entitlements.

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